Payday is always a happy day for salary earners. The first instinct after receiving your earnings is usually to restock and buy everything you had longed for since the month began. However, it is necessary to save money for yourself from your earnings.
If you find yourself wondering where all your money went one week after payday, consider being intentional with your finances. The first step to attaining financial freedom is to save some money after payday. We know how hard it is to save money, but knowing the steps to take will relieve you of the burden. In this article, you’d learn how to save from your monthly earnings as you work toward meeting your financial goals.
Determine your financial goals
The first step to planning your savings is to determine your financial goals. What do you want to save for, and how do you intend to save comfortably towards it? After answering these questions, you can easily calculate how long you will need to save to grow your money and achieve that goal. A well-defined financial goal will align your finances and keep you on track.
Prioritize needs over wants
You may have outlined a list of things you planned to buy as soon as your salary comes in, but avoid making hasty financial decisions. Before purchasing anything, take some time to think about whether the decision you are about to make is profitable or not. This strategy will help prune your expenses to focus on your needs rather than your wants.
“Too many people spend money they haven’t earned, to buy things they don’t want, to impress people they don’t like.”
Will Rogers
If your expenses are more than your income (or use up most of it), you will need to cut down on the excesses to save a little extra. Itemize your expenses according to your needs and wants. Then, identify the non-essentials that you’re spending too much on and reduce the amount you spend on them.
Save first before spending
Develop the habit of saving before spending and not after. If you truly desire to start saving, you’ll need to prioritize savings rather than spending. Set aside a percentage of your earnings and save it (at least 20% or any amount you are comfortable with) every month before you start spending.
Take advantage of Bucket on SolomonHills to save a percentage every month from your earnings. You can easily set up automatic periodic contributions from your bank account by connecting your debit card to help keep you prudent in your savings. Treat saving money as a bill; that’s how to pay yourself first.
Invest your savings
Don’t just save to save; save to invest and grow your earnings. After your savings have grown to a considerable sum, you can then invest it in a high-yield instrument like Hills. Successful investing is about staying in the game for the long term. So, Hills is designed to offer you a balance of dividends and growth. It offers a convenient automatic reinvestment of your funds, with the extra benefit of daily compounding interest.
